ACC Ltd, the popular cement maker, witnessed a two-fold increase in consolidated net profit during the second quarter (April-June) of Jan-Dec fiscal year.
It reported a net profit of Rs. 569.45 crores at the end of June 2021. Same time last FY, the company managed to rake in around Rs. 271 crores.
This increase in revenue was chalked up to increased sales, cost-efficient operations, and a lower base.
ACC Ltd.’s parent company, Holcim Group, witnessed a similar upsurge in revenue during the same quarter.
The Swiss building material firm clocked Rs. 3,884.94 crores profit in the April – June quarter. It is a significant increase compared to Rs. 2,602.24 crores reported in the same period a year ago.
Cementing its market position!
While ACC earned Rs. 2550.99 crores from cement sales in the second quarter of 2020, Q2 2021 showed a massive 43.96% increase in revenue in this segment.
According to the latest reports, this coincided with a total profit of Rs. 3672.31 crores.
Its ready-mix concrete business segment showed a similar appreciation. In fact, this growth rate was higher at four times that of the previous year. In Q2 2021, this segment brought in Rs. 255.08 crores.
ACC CEO and Managing Director Sridhar Balakrishnan named cost optimisation and efficient supply chain management as some major factors behind this rapid growth. Additionally, Waste Heat Recovery Systems were also partly responsible for this successful quarter.
Looking at half-yearly progress
Besides the second-quarter data, ACC also released information regarding its performance in the first half of 2021. The most impressive of which was its 90.59% increase in consolidated net profit. Compared to the previous year’s Rs. 593.97 crores, ACC Ltd., was able to rake in Rs. 1132.04 crores in H1 2021.
Operational revenue surged by 33.96% year-over-year, from just Rs. 6103.95 crores to Rs. 8176.91 crores during the first half of 2021.
How does this report matter for the company?
A jump in share prices!
Due to its positive performance report in the second quarter, ACC Ltd’s shares witnessed a 7% increase in prices on 20 July 2021. The market opened with its shares trading at Rs. 2299.05.
ACC shares have been outperforming competitors throughout 2021. In the past month, the counter gained by more than 70%, while in the past six months, it has delivered over 40% returns.
The other side of the coin
The company’s expenses have also undergone an upsurge. Per the recent report, the cement maker spent Rs. 3175.47 crores in the second quarter of 2021, which was a 40.97% increase. Previously, this expense was limited to Rs. 2252.62 crores.
While ACC Ltd has enjoyed a good run in the last quarter, it remains to be seen whether the company can maintain its momentum. With cost-effective supply chain management, its revenues may climb further.
Frequently asked questions
- What is the current price for ACC shares?
According to the latest update on 20 July 2021, ACC shares are trading at Rs. 2274.95 apiece.
- What is the percentage of revenue growth for Holcim between Q2 2020 and 2021?
Holcim, ACC’s parent company, reported a 49.29% growth in revenue in Q2 2021 compared to the same period last year.
- When was ACC Ltd. incorporated?
The company underwent incorporation in 1936.